You bought a house with undisclosed defects – now what?

You’ve just moved into your new home. You’re excited to finally have the hassle of real estate negotiations and moving behind you, and you’re looking forward to settling in.

But there’s a storm not long after, and your basement fills with several inches of water.

You didn’t see that coming and you know that fixing the problem is going to cost several thousand dollars. Are you stuck with the bill?
Almost every state has disclosure laws requiring home sellers to share certain information about the condition of a home. Generally, sellers have to speak up (i.e. sign an official disclosure document) when they’re aware of structural, HVAC, drainage, roof, radon, and other issues.
If you find a problem after purchase, check the disclosure statement in your sale agreement. If the issue wasn’t disclosed, you may have the right to sue. Consider the following:

• Was the defect present and apparent? When making a claim for non-disclosure you need to prove that the defect was intentionally hidden or undisclosed. For example, if the basement had clearly observable cracks and a waterline up the wall, it could be argued that you should have noticed those faults during a walkthrough.
• Do you have evidence the seller knew about the problem? Sellers are required to disclose known issues, but they’re not required to scout out problems on their own. If you choose to pursue legal action, you’ll need evidence the seller knew about the defect and intentionally withheld that information. Getting proof could be a challenge. However, if walls were freshly painted at the site of a plumbing leak, you may be able to argue the seller knew about a problem.
• Did you have a home inspection? In some cases, a home inspector can be held liable for failing to uncover problems it would have been within their professional purview to detect.

Consult an attorney to determine if legal action is in your best interest. Your attorney may be able to help you resolve the issue through settlement, mediation or court action.